N.J. creates mortgage relief program for unemployed homeowners

AP file photoA foreclosure sign is seen on the lawn of a home in Egg Harbor Township, N.J. in this 2008 file photo. The newly introduced HomeKeeper program aids unemployed homeowners, hopefully sparing them from foreclosures.

TRENTON — Unemployed homeowners in New Jersey struggling to make their mortgage payments can now get interest-free government loans.

The HomeKeeper program enables homeowners to borrow up to $48,000 to cover mortgage payments, insurance and taxes. Monthly payments are deferred for up to two years.

U.S. Sen. Robert Menendez of New Jersey says the program will help responsible homeowners whose mortgages and livelihoods were jeopardized through no fault of their own during the recession.

Although the state will administer the program, the funds come from the U.S. Treasury's Hardest Hit Fund.

Those who have lost their jobs or become underemployed are eligible to apply. After five years, 20 percent of the loan is forgiven every year.